Saturday, January 26, 2013

AAPL 1QFY2013 Earnings

Apple reported earnings
after the bell on January 23rd. Apple reported $54.5B in
revenue compared to $46.3B in the year ago quarter and
record quarterly net profit of $13.1B. Gross margins fell to 38.6
percent compared to 44.7 percent a year ago. Apple sold a record 47.8M iPhones in the quarter compared to 37M in the year-ago quarter and 23
million ipads. iPad sales were constrained due to supply falling short of
demand for their new hand size tablet--the ipad mini. EPS came in at $13.81
compared to estimates of $13.47 down from $13.87 a year ago.

While profits and
earnings were flat from a year ago, one thing we feel the market isn’t taking
into consideration is that last year Q4 had 7 more days then this year’s
quarter. Taking that into account Apples revenues rose 25% while EPS rose 13.5%
from the same quarter a year ago. Apple
sold 4.1 macs compared to 5.2 Mac in the year ago quarter. Mac sales were down
reflecting IDC’s prediction of a 6% contraction in the personal computer market
during the December quarter.

A dividend of $2.65 was declared compared to no
dividend a year ago. In addition, Apple is changing their approach of how they
provide guidance to promote more transparency into their business. Previously guidance
reflected a single point conservative estimate the company had reasonable
confidence in achieving. Going forward they are providing a range of guidance
that they believe they are likely to report within. The stock reacted
negatively diving almost 13% to $450 from $514. For 2Q13’ revenue guidance is
projected at 41- 43B and gross margin guidance estimated at 37.5% -38.5%. Apple
has increased their product ecosystem and we remain excited for their product
pipeline.